- Banks approve on spot conditional housing loans amounting to Rs7.4 billion
In an overwhelming response to the first ever Mera Pakistan Mera Ghar (MPMG) Mela organized by State Bank of Pakistan in Faisalabad, banks logged in applications of Rs18 billion from applicants. In the two-days Mela, held on March 19-20 more than 30,000 people visited to obtain information about the MPMG and apply for loans through banks’ one-window facilitation. Against the applications logged in, banks provided conditional approvals of around Rs7.4 billion loans.
At the inauguration ceremony of the Mela, Dr. Reza Baqir, Governor State Bank in his keynote address took the audience through MPMG journey. He mentioned that through continuous efforts by SBP, Government, NAPHDA and banks, the number of applications for financing and their approvals are consistently on the rise as banks approved over Rs4.5 billion and disbursed around Rs2.3 billion loans per week.
As a result of the MPMG scheme, applications for financing for affordable housing that was almost non-existent around 15 months ago reached to Rs357 billions of which Rs157 billions of applications have been approved and Rs56 billion disbursed.
Inauguration ceremony was also addressed by Faiz Ullah Kamoka, Chairman National Assembly Standing Committee on Finance and Farrukh Habib, Minister of State for Information. Both the speakers highlighted Government’s special focus on promoting housing and construction finance, especially for the low and affordable housing.
Beneficiaries of MPMG are getting financing at fixed and subsided rate as the Government is providing subsidy for this underserved sector.
Inauguration ceremony was attended by CEOs of banks, dignitaries of Faisalabad including top businessmen, academia and media.
During the Mela, 25 banks and 28 builders/developers installed their stalls and made arrangements to receive applications, processing of applications after eCIB clearance, calculating installment amount and giving conditional approval letters to the applicants.
Despite, scorching heat, long queues of interested applicants were seen on banks stalls. In order to create healthy competition among banks, their performance during Mela were measured against five categories and made public to recognize their efforts. The results of this competition were as follows:
- Meezan Bank for having most innovative stall
- Meezan Bank for having highest applications logins
- Bank of Punjab and National Bank of Pakistan being the quickest bank in offering first conditional approval letter to an applicant
- Allied Bank for providing highest number of conditional approval letters to applicants
- Bank Al-Habib for best quality of service
Throughout the Mela, SBP’s senior officials visited stalls of the banks and developers to oversee the progress. Complaints of interested applicants were addressed on spot.
Senior officials including Presidents and regional heads of banks frequently visited the Mela and guided the applicants. All these resonated well with the key objective of the Mela, highlighted by the Governor State Bank during the inauguration session that the general public must witness and believe that they are getting financing under flagship MPMG scheme.
SBP Initiatives to Promote Financing under MPMG
State Bank has taken various regulatory measures to create conducive regulatory environment, few of them are listed below:
- Relaxation of DBR in case bank rely on repayment surrogate for extension of financing
- In case of use of informal income estimation models, banks will be exempt from requirement of verifiable income only
- Banks/DFIs are allowed to extend low cost housing finance against personal guarantee of a third party for a maximum period of one (01) year
- Standardized loan application form
- Standardized Facility Offer Letter
- Standardized set of documents required for financing approval
- Standardized set of property documents required for disbursement of financing
- Punjab Government’s online portal for banks to verify
- Punjab and KPK’s on line portal listing approved projects
Launch of online complaint management system for Government Markup Subsidy Scheme
- SBP developed an online complaint management system and made it live.
- Complaint resolution time is maximum 8 working days.
- Banks have nominated focal person in each region for complaint resolution.
- All SBP BSC offices are also involved.
- Implementation of standardized income proxy model developed by banks to facilitate housing finance to customers with informal sources of income.
- Development and implementation of advanced Statistical scorecard Model for housing finance.
- Pursuing banks to develop comprehensive statistical scoring model to ensure flow of formal housing finance to individuals employed in informal sector.
- Development of technological solutions for acquisition of data from primary sources (telcos, utility companies, Government agencies, etc) to improve the traditional credit approval process to a scorecard and behavior pattern analysis.
[box type=”shadow” align=”” class=”” width=””]Financing availed under MPMG Scheme can be used for:
Purchasing a house/flat/apartment
Purchasing a plot and construction there upon
Extension in pre-owned housing unit
Construction on already owned plot[/box]